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Tata Motors

Capital Market/ 18:49 , Feb 15, 2013

Loss in domestic business and lower JLR profits lead to a disastrous show

Global auto player, Tata Motors put up a very weak show for the third quarter ended December 2012. The company's third quarter consolidated net profit declined by 52% on a y-o-y basis to Rs 1,628 crore on the back of a huge loss in its domestic business and lower profits at its luxury Jaguar Land Rover unit. The company's consolidated revenue for the quarter rose 2% to Rs. 46,090 crore, also below street expectations.

The company's domestic operations have been hit hard due to sluggish sales growth across passenger cars and medium and heavy commercial vehicles sectors. Weak macro-economic environment and competitive pressures on pricing, continued to impact the operations during the quarter.

The India's largest bus and truck maker reported a standalone net loss of Rs 458 crore, compared with a profit of Rs 174 crore a year ago. Standalone revenue declined to Rs 10,630 crore from Rs 13,338 crore.

Tata Motors' total standalone sales (CV + PV) slipped 11% to 2.05 lakh units, mirroring the overall industry wide slowdown.

Its JLR unit retailed 88,658 vehicles in Q3, up 14% from a year ago, driven by strong demand from China and sales of the Range Rover Evoque and Freelander SUVs.

Quarterly performance

In the domestic market, the commercial vehicles sales for the quarter ended December 2012, stood at 1,38,963 units, driven by the LCV segment, and the Company's overall market share in commercial vehicles improved sequentially and stood at 62.6% for the quarter. The passenger vehicles sales, stood at 54,675 units for the quarter ended December 2012, and the overall market share in passenger vehicles stood at 8.4% for the quarter and 10.1% for the period ended December 12.

JLR wholesales for the quarter ended December, 2012, grew 9.9% over corresponding period last year to 94,828 units. Of this, the Jaguar volumes for the period stood at 15,043 units and Land Rover volumes at 79,785 units. Growth in volumes is driven by continued strong demand from China and sales of Range Rover Evoque and Freelander.

Operating profit margin on a consolidated basis for the quarter stood at 12.3% against 15.1%. The effect of lower raw material cost was negated by impact of higher employee and other expenses (all items, net of sales, stock adjusted). Raw material cost decreased by 100 bps to 59.7%. Other expenses shot up by 240 bps to 17.7%. Employee cost too increased by 220 bps to 9.1%. Operating profit fell by 17% to Rs 5657 crore.

With 13% rise in other income to Rs 188.64 crore, PBIDT registered 16% drop to Rs 5846 crore. Interest and depreciation charges increased by 30% and 28% respectively.

The Consolidated Profit before forex gain/loss and exceptional item and tax was Rs 2,841 crore, a drop of 39%. There was 6% rise in forex loss. The Consolidated Profit Before Tax for the quarter was Rs 2,667 crore, a drop of 41%. The Consolidated Profit (after tax and post minority interest and profit in respect of associate companies) for the quarter was Rs 1,627 crore, a drop of 52% over Rs 3,405 crore for the corresponding quarter of the previous year. Tax rate increased substantially to 38.6% against 23.8%.

Segment wise, Tata and other brand and other vehicles, spares and financing constituted 27% of total revenues during the quarter while rest 73% came from Jaguar and Land Rover. Sales from the former dropped 17% during the quarter to Rs 12,345 crore while sales from JLR jumped 11% to Rs 33,456 crore. In terms of profitability, Tata and other brand and other vehicles, spares and financing constituted 4% while rest 94% is from JLR. PBIT from Tata and other brand and other vehicles, spares and financing dropped by 83% to Rs 138 crore while operating profit from JLR fell by 21% at Rs 3394 crore.

On a standalone basis, the revenues (net of excise) for the quarter ended December 31, 2012, stood at Rs.10,630 crores, as compared to Rs.13,338 crores for the corresponding quarter of the previous year. The operating margin was 2.2% for the quarter ended December 31, 2012, as compared to 6.7% for the corresponding quarter last year. Loss Before Tax and Loss After Tax for the quarter ended December 31, 2012 was Rs.601 crores and Rs.458 crores, respectively, against the Profit Before

Tax and Profit After Tax of Rs.186 crores and Rs.174 crores, respectively, for the corresponding quarter last year.

For JLR, revenues for the quarter ended December 31, 2012, of GBP 3,804 million represented a growth of 1.5% over GBP 3,749 million during the corresponding quarter last year. Operating profit stood at GBP 533 million in the quarter, as compared to GBP 639 million during the corresponding quarter last year. Operating margin for the quarter ended December 31, 2012, stood at 14.0%, lower than a strong

quarter a year ago, reflecting product mix, the ongoing effect of higher marketing costs compared to the low levels experienced in Q3 of the prior year, launch costs of the all-new Range Rover, run out of the earlier Range Rover, and continued growth in product investments and related costs to support future business growth. The Profit Before Tax for the quarter ended December 31, 2012, was GBP 404 million (GBP 509 million in the corresponding quarter last year). Profit After Tax for the quarter is GBP 296 million (GBP 393 million in the corresponding quarter last year).

Nine Month Performance:

The consolidated revenue (net of excise) for the nine month ended December 2012, was Rs 132816 crores posting a growth of 16% over Rs 114746 crore for the corresponding period last year. The Consolidated Profit before Tax for the nine months was Rs 8,939 crore, compared to Rs 9,109 crore for the corresponding period last year, a drop of 2%. The Consolidated Profit (after tax and post minority interest and profit in respect of associate companies) for the nine months ended December 2012 was Rs 5,947 crore, a drop of 18% over Rs 7,282 crore for the corresponding period last year. Profits got curtailed due to 1300 bps rise in tax rate.

Segment wise, Tata and other brand and other vehicles, spares and financing constituted 28% of total revenues during the first nine months while 70% came from Jaguar and Land Rover. Sales from the former dropped 10% during the nine months to Rs 37,968 crore while sales from JLR jumped 31% to Rs 94,037 crore. PBIT from Tata and other brand and other vehicles, spares and financing dropped by 37% to Rs 1,640 crore while operating profit from JLR shot up by 11% at Rs 9,688 crore.

On a standalone basis, the revenues (net of excise) for the Nine months ended December 31, 2012, were Rs.33,698 crores as compared to Rs.37,916 crores in the corresponding period last year. The Operating margin for the Nine months ended December 31, 2012, stood at 5.2%. Profit Before Tax and Profit After Tax for Nine

months ended December 31, 2012, was Rs.660 crores and Rs.614 crores, respectively, against Rs.689 crores and Rs.677 crores, respectively, for the corresponding period last year.

The Profit Before Tax for the period included dividend from Jaguar Land Rover and other subsidiaries amounting to Rs.1,575 crores (Rs.105 crores in the corresponding period last year).

For JLR, the revenues for the Nine months ended December 31, 2012, were GBP 10,730 million as compared to GBP 9,367 million in the corresponding period last year. The Operating margin for the Nine months ended December 31, 2012, stood at 14.4%. Profit Before Tax and Profit After Tax for Nine months ended December 31, 2012, were GBP 1,168 million and GBP 837 million, respectively, against GBP 976

million and GBP 785 million, respectively, for the corresponding period last year.

JLR issued new 10 year bond of USD 500 million at 5.625% p.a. during January 2013 due 2023. JLR has invested CNY 700 million in the JV company in Vhina.

Other Information

  • For the nine month period ending Dec 2012, the company allotted 25 Ordinary shares and 26,075 'A' Ordinary shares out of shares held in abeyance; and 22,370 Ordinary shares upon conversion of one Convertible Alternative Reference Securities (CARS) due 2012 and 1,60,95,391 Ordinary shares upon conversion of 422, 4% Foreign Currency Convertible Notes (FCCN) due 2014
  • The scrip closed at Rs 304.1 at BSE on 15 February 2013, up by 2.5% after trading as low as Rs 288 earlier during the day.

Tata Motors: Consolidated Results

 

Particulars1212 (3)1112 (3)Var.(%)1212 (9)1112 (9)Var(%)1203 (12)1103 (12)Var.(%)
Total Operating Income46089.545260.252132815.99114746.5916165654.49122127.9236
OPM(%)12.315.112.613.613.513.8
OP5657.36827.0-1716745.815566.8822311.216817.533
Other Income188.64167.5213634.06503.1926661.77429.4654
PBIDT5845.96994.5-1617379.916070.0822973.017247.033
Interest934.58720.43302586.322210.13172982.222385.2725
PBDT4911.356274.07-2214793.5313859.82719990.7514861.6935
Depreciation2069.971615.94285230.234089.98285625.384655.5121
PBT before forex gain/loss2841.384658.13-399563.39769.84-214365.3710206.1841
Forex gain/loss-173.53-164.346-598.8-660.29-9-654.11231.01PL
PBT Before EO2667.854493.79-418964.59109.55-213711.2610437.1931
EO000-25.360999-177.430999
PBT after EO2667.854493.79-418939.149109.55-213533.8310437.1930
Tax provision^1031.841071.09-42888.31786.0462-40.041216.38-103
PAT1636.013422.7-526050.847323.51-1713573.879220.8147
Less: Minority Interest15.1920.96-2865.8458.41382.3348.5270
Share of profit/loss of associates6.683.8175-37.8617.39PL24.92101.35-75
Net Profit1627.53405.6-525947.17282.5-1813516.469273.6446
EPS*20.442.724.930.442.929.1
* Annualized On Current Equity Of Rs 638 Crore.
Face Value: Rs 2
^ Tax Provision Includes Current Tax, Deferred Tax And Fringe Benefit Tax
Var. (%) Exceeding 999 Has Been Truncated To 999
LP: Loss To Profit PL: Profit To Loss
EO: Extraordinary Items
EPS Is Calculated After Excluding EO And Relevant Tax
Figures In Rs Crore
Source: Capitaline Corporate Database

Tata Motors: Consolidated Segment Results

 

1212 (3)1112 (3)Var.(%)1212 (9)1112 (9)Var(%)1203 (12)1103 (12)Var.(%)
Segment Revenue
(I) Automotive And Related Activity:
Tata Vehicles/Spares & Financing Thereof12345.1914839.18-1737968.5042247.25-1059921.250799.7118
Jaguar & Landrover Business33456.7030146.011194037.3971731.0231104750.970467.3449
Less: Inter Segment Elimination22.867.3721065.1224.7816367.8928.78136
Total Automotive45779.0344977.822131940.77113953.4916164604.21121238.2736
(II)Others592.92533.9111670.531390.05201948.61530.4927
Total Segment Revenue46371.9545511.762133611.30115343.5416166552.81122768.7636
Less : Inter-Segment Revenue282.45251.5112795.31596.9633898.37640.8440
Net Sales46089.5045260.252132815.99114746.5816165654.44122127.9236
Segment Results
PBIT
(I) Automotive And Related Activity:
Tata Vehicles/Spares & Financing Thereof137.92819.57-831640.132620.15-3741524274.1-3
Jaguar & Landrover Business3394.964324.68-219688.388703.461112359.457750.7859
Less: Inter Segment Elimination000000000
Total Automotive3532.885144.25-3111328.5111323.61016511.4512024.8837
(II)Others83.6998.87-15272.19214.6227294.88203.4845
Total Segment Results3616.575243.12-3111600.711538.23116806.3312228.3637
Less : Inter-Segment eliminations29.2532.08-985.1461.4539120.4766.3981
Net Segment Result3587.325211.04-3111515.5611476.78016685.8612161.9737
add/Less:
Interest Expense (Net)934.58720.43302586.322210.13172982.222385.2725
Other Unallocable Income Net Off Unallocable (Expenditure)188.64167.5213634.06503.1926661.77429.4654
EO-173.53-164.346-624.16-660.29-5-831.54231.01-460
PBT After EO2667.854493.79-418939.149109.55-213533.8710437.1730
Capital Employed
(Segment Assets Less Segment Liabilities)
(I) Automotive And Related Activity:
Tata Vehicles/Spares & Financing Thereof43495.4536715.311838062.5629346.1230
Jaguar & Landrover Business41280.3130146.043731265.6620645.951
Less: Inter Segment Elimination
Total Automotive84775.7666861.352769328.2249992.0239
(II)Others1087.08978.811980.75837.1417
Total Capital Employed85862.8467840.152770308.9750829.1638
Less: Inter Segment Eliminations499.29359.3939414.42308.2834
Net Segment Capital Employed85363.5567480.762769894.5550520.8838
Unallocable Assets/Liabilities-42886.65-40710.085-36744.92-31349.4117
Capital Employed42476.926770.685933149.6319171.4773
LP: Loss To Profit; 
PL: Profit To Loss
Var. (%) Exceeding 999 Has Been Truncated To 999
EO: Extraordinary Item
Figures In Rs Crore
Source: Capitaline Corporate Database

 



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